Faculty Spotlight: Finding a better model to detect insurance claims fraud

Jing Ai, associate professor of finance and First Insurance Company of Hawaii Distinguished Professor.
Jing Ai, associate professor of finance and First Insurance Company of Hawaii Distinguished Professor.

Associate Professor of Finance Jing Ai is developing better models to deter, detect, and manage fraudulent claims. Her research focuses on designing business analytical models and applying them to real data to predict the likelihood of fraud.

In her research, Ai and her co-authors developed a specific type of “unsupervised method” called the PRIDIT model for fraud detection and applied it to automobile insurance claims in the U.S. and Spain. Through this method, they were able to identify and rank suspicious claims with high accuracy and also estimate the percentage of fraudulent claims in the population.

Ai suggests Insurance companies can benefit greatly by using her validated model in their fraud management system to monitor and uncover fraudulent activities on an ongoing basis.

In her latest research, she focuses on understanding fraudulent healthcare claims that affect public programs or government-subsidized health insurance. Ai says predictive modeling methods including her own method can be used in combination with previously identified fraud predictors to successfully detect fraud. This will help provide insights and recommendations for healthcare practitioners and public policy makers in reducing fraud in public programs.

Ai is the First Insurance Company of Hawaii Distinguished Professor and an associate professor of finance at the Shidler College of Business.

In addition to her research in developing business analytics models, Ai’s research interest includes empirical and/or theoretical research in topics including enterprise risk management, behavioral insurance, longevity risk management, and insurance regulation. Her research papers have appeared in premier academic journals, such as Journal of Risk and Insurance, Insurance: Mathematics and Economics, North American Actuarial Journal (NAAJ), and Geneva Risk and Insurance Review, and are presented at many national and international conferences. Her papers have also won national awards such as the 2015 Spencer L. Kimball Award Writing Award of the National Association of Insurance Commissioners and the Most Outstanding Journal Article Award in 2016 by the Society of Actuaries. Ai is currently serving as an associate editor for the NAAJ and International Journal of Financial Consumer.

She received her PhD and Master’s Degree from the University of Texas at Austin and her Bachelor’s Degree from Tsinghua University in China.

For a copy of her research, contact jing.ai@hawaii.edu.